Francois: Our first guest speakers, we have Harry James, who's been an entrepreneur for 35 plus years with numerous businesses, restaurants, a quarry, and a company that focuses on finance and employee benefits. Harry is a certified real estate junkie with more than a hundred million dollars of deals in the rear view mirror, devoted to playing the game to win while protecting his most precious asset, time. Harry has partnered with Sarah as well on a few development projects, one being the Inspire Beach Resort in the Kawarthas.
Sarah Larbi is a real estate investor, developer, speaker, mentor, coach, co-host for Everyday Investor TV show, podcast host. She left her nine to five job. In 2020 after only seven years from her first real estate investment deal. She loves the BRRRR strategy, but not the cold and has pivoted to adding commercial, to residential conversions to her portfolio, as well as building the Inspire Beach Resort with her partners, Harry James, Joe Ferrera. And lastly, she is one of the co-founders of The REITE Club. So congrats on your Inspire Beach Resort, Sarah and Harry. I understand you rolling out the red carpet soon, so take it away.
Sarah: Thank you very much, Francois. Thank you for the intro. Hey everybody. Hi, Harry. I'm excited to be presenting with you again today. Who knew that was a crazy idea? Would be where we are today. We have a bit of a presentation, but Harry and I will take turns going through and sharing what we're learning along the way.
I'll tell you when I had the crazy idea of starting this resort. Harry, you're a trooper for coming along and coming along for the ride. And I think we've got a great product that's forming. Let's go through our initial concept and how we turn this into a reality. By the way, this is our contact information. My Instagram actually has been hacked again, unfortunately.
Hopefully, I get it back soon, but if you wanna reach out to Harry that's his Instagram as well. Harry, when you and I were talking about Inspire Beach Resort or before it even was a concept. Have you ever wanted to build a resort? It's a business as well as real estate. What are your thoughts on that?
Harry: No, It's interesting, Sarah. What's been really neat for me in this real estate journey is my passion and interest in real estate has caused me to get involved in other businesses. As a result, for example, we've owned three restaurants which I failed miserably at, but we did own the buildings. And now all the people running them are very successful. I don't know what that tells you. I do have a boutique, event center, which is doing very well.
As a result of real estate bought 13, 14 years ago, about 168 acres in the Kawarthas. It was a quarry, really a dilapidated quarry that wasn't doing much. We started Kawartha rock quarry, which is probably now one of the most successful boutique quarries in Ontario, which I sold out to my partners during COVID for various reasons, but very proud of that company that we started.
It's pretty neat when organically your passion and interest in real estate also births a business that can create some fun. And I think that's really what's happened here with the Inspire Beach Resort.
Sarah: Absolutely. Back in 2021, we were looking for something like this. We originally had a piece of land and it didn't work out for that piece of land. But I think the idea of doing some really cool, tiny cottages and theming them came about, and then we started looking for initially how it all happened. It was just land that was zoned for a resort. And I'm like, Harry, Joe, do you guys wanna come into this crazy project? You guys said, okay, here we are.
It is really cool to see something from nothing. We wanted to share a little bit about what we bought and how we went, we bought it for and all that good stuff. Cause I'll tell you there's lots of apps and there's lots of downs and there's lots of learning.
And if I don't think this is for the faint of heart because there's no proven way to build a resort and run a resort and do it from start to finish. It's not like the BRRRR strategy. But I think it's fun. I think it's a challenge. But originally we wanted to do these tiny cottages and themed them.
There's actually still themed cottages. I don't think they're as tiny, maybe as we initially thought, but they're actually beautiful or we're gonna show you guys some pictures. We themed each one and we really wanted to create more of an upscale look and feel and an adults only resort cause I don't think there's many in Canada that cater to adult relaxation, lifestyle luxury and that kind of stuff.
Luckily, we ended up finding this place. It was actually on the MLS zoned for resort. It was a prior resort many years ago. It was essentially raw land that we bought with a decrepit house that we ended up tearing down. But that's six acres or five and a half acres of pretty much Woodland plus a couple acres of grass space. And then we ended up buying another acre next to it, where we're gonna build a bigger cottage now. This is a five year project. This is not for a quick type of thing.
The first phase is actually launching October 7th, we're gonna have three cottages that are gonna be finished. And then every year for the next five years, we're gonna build onto it and really create a unique resort. Harry, do you wanna talk a little bit about what it takes to develop, what it takes to build? And, maybe if you could share a little bit of the numbers of what we're looking at from a construction standpoint?
Harry: I think what's neat when, again, you're in the real estate journey. When you can pursue a project where you're creating something, that's almost an art form and the equity or the cash flow or the upside is almost a byproduct of that. It's a much different set of criteria than if you bought an apartment building where you can look at cap rates or the BRRRR strategy where you can anticipate all the things that you might be dealing with within 5% or 10%.
This is vastly different because Sarah's the one that had this passion or bean or bonded about tiny cottages. It was an idea which was how a lot of entrepreneurs birth, pretty cool things. And she convinced Joe and I that maybe we had a couple, two glasses, too much wine. Francois, I don't know, but she convinced Joe and I to get involved. And honestly, I got that gut feel that this could be a pretty exciting and lucrative thing to do.
I certainly felt on the real estate side that it was gonna be successful. I must confess that from a business standpoint, anytime I've gone outta my lane, we are into businesses. I didn't know anything about it. It often, frankly, hasn't ended well. I learned a lot about that and we stiffened up the criteria to make sure, but the nice thing for me as I had Sarah, who does an amazing job with the details of Airbnb and turning things over and cleaning.
That's the part of the business that frankly, I personally didn't want to be too involved in the construction and development itself. That's where Joe and I Napa valley developments and Harry James's enterprise. We had a pretty good feel for what it would take. COVID is always the excuse for ripping you off and charging you more and under promising.
And I shouldn't say over promising and under delivering, but at the end of the day, we built three cottages, high end cottages. Beautifully furnished with these themes. I think the furniture in each cabin, they're only about 550 square feet, it's about $50,000 worth of furniture.
When you walk in there's that wow factor, that luxury feel. It's the kind of place where you'd go away just to recharge your batteries or date your spouse, or celebrate a special event or for a planning session to reflect on what you want the next chapter, your life to look at. The cost up to this point. When you're doing these types of things, it's not just the cabin. There's the water, there's the water purification systems to make sure that you meet all the criteria of the ministry. There's the septic system. There's certain formulas they use to determine how many toilets you can have and how many guests you can have.
There's the parking, there's the landscaping, there's the beach. There's the dock, there's security. So at the end of the day, we're probably into it for about 1.75, 1.8 and that's given us the bones that's given us the first phase we now have once we got our hydro pole, which we frankly don't have yet, we ordered that back in March, but again, COVID is just a fabulous excuse for municipal doing absolutely nothing.
Once we get our hydro pole, we have now birthed and we'll be able to open Inspire Beach Resort, which has three beautiful cabins, a sauna. Each cabin has its own private hot tub on a deck. A beautiful 200 foot beach or 400 foot beach. We will have kayaks, we'll have some paddle boards, so it'll be a place where you can go chill, relax. We're gonna cater with food and massages and all that kind of stuff. And taking the door open has been about actually, it's been quite quick on the development side, cuz Sarah was wise enough and smart enough to find us something that was zoned and ready to go, which is very rare. We're not even, I think, a year into this yet or are we Sarah?
Sarah: We closed in June, 2021, so just over a year.
Harry: Okay. Here we are opening a business in all, and frankly, just over the nice thing is to give you real numbers or 1.7 into the construction. We paid 1.15 and I'm told actually by one of the appraisers that came to our conference as well as a local real estate agent, the market value is probably four and a half million right now. We have a million two upswing, which, if as a psychological soor makes you feel good that at least you have.
Equity in the project. Now, after one year we've made, I guess on paper, a million million too, but the real question is gonna be. And the real challenge is gonna be, how do we create a great reputation, a place where people want to go, people want to book and they're gonna get on. The Google review and say this was worth it. That's really the phase that we're starting to enter now, if that's accurate, Sarah.
Sarah: Yeah, absolutely. One of the beauties of it is, like you said, it's on paper, but I think we have different exit options if we need to. Obviously our initial plan is to run this is not a horrible idea knowing that we have a million dollars if we had to sell tomorrow, not that we would. We could. And then the piece of land that we bought next door as well, could be a beautiful cottage. And we could also have that as an exit, that's a residential lot.
Harry: That's next point. I should pause there for a second because it is two separate pieces. We put it in two separate piece companies, so it wouldn't merge, it's an excellent point. We paid four 50 that it's probably worth six 50 now. If we built a beautiful cottage, it'd probably be, 1.8 to 2 million.
That almost becomes a contingency plan. But the other thing I didn't mention in terms of construction, when it's all said and done, we will have nine places for people to stay: five cabins, a main lodge with a meeting area, with four cabins above overlooking the lake. That will be Inspire Beach Resort nine complete.
When we build the rockstar cottage next door, even though it's a separate entity, we're gonna do it for a wedding. If you are having a wedding, you can stay in this beautiful 3000 square foot rockstar cottage with an infinity pool. All your loser friends can stay in the cabins and then you can celebrate whatever event you have going with.
It's a corporate event, a wedding, a planning session for a company. It's gonna be a really cool place where it'll be very turnkey, very simple, everything close, but very high end and frankly, very private, something that Sarah did for me before we got into this. She showcased a wander resort as a framer reference for how successful this could be.
I'm not putting down one resort, but when we drove out there.
Sarah: We went to visit.
Harry: The cabins were on top of each other. Only two cabins faced the lake. There was a mushroom farm next door that stumped 24/ 7. They were getting 800 or a thousand bucks per night per cabin. When I look at what we've built and inspired, I'm not comparing or saying it's as good as wander, but we have five and a half acres.
These little cabins are literally carved out in the woods. Private, all different elevations, looking onto the beach, a little private walk to the sauna. If I was gonna take my wife away for the weekend, I frankly, would much rather be at Inspire Beach Resort than wander, but maybe I'm a little bit not objective on that.
Sarah: Also I will say, I think this was a conversation that we had so they were really nice that they were able to give us a walkthrough of the entire resort. Then one thing that I like, I will not go into this hot tub. I don't like the communal hot tubs right. Where they had one big hot tub. We're gonna have individual hot. Per cabin. I think that, for somebody that's looking for a little bit of privacy and that luxury, little things like that, definitely add up along the way. These are some pictures. This is one of the cabins. This is the lodge cabin.
We're gonna have one called the vintage Hollywood cabin. We're gonna have a lake house cabin, and then we're gonna theme them all differently. But you can tell like from the inside, I think it was like $40,000 plus to just furnish each cabin with the furniture. We had a wonderful lady by the name of Angela from lake shore designs.
I think she does the princess Margaret decor and stuff like that for those homes. She really puts all of these ideas and thoughts into reality for us.
Harry: I think what's important is the series too. We could have done it for 10 grand. Anytime you're offering something there, you have to create a unique extra in your experience. The question that anybody asks any business is why should I deal with you? If you look at that multi thousand dollar light there is $45,000 from the furniture, if you're gonna charge $800 a night for a cabin, there needs to be a wild factor. There needs to be that private hot tub. There needs to be the sun, and there needs to be the high end white glove service.
Otherwise the words and the music don't match. It's scary when you do that, though, because as a real estate investor, you're saying to yourself hold on, I could finish this cabin for 10 grand. Why am I spending 50? But then you have to think of the business marketing side of now you're launching a business.
You need to win over a clientele. You're trying to compete in the marketplace. You have to take that step of faith that, if you build it, they will come. We're at the front line, the starting line of that. Maybe a year from now, Sarah and I will be online saying it worked, or we might be online saying we failed miserably, but at least we had fun trying.
Sarah: Absolutely. That's a great point. And but we'll, this is ultimately a business. This is a business that we're not, it's not just real estate and it's not just Airbnb, but it's a whole business alongside events and weddings and everything like that.
But so you know, a hundred percent this is lake house cottage and concept, these are almost done. I think we're like a week. Or two away from having the completed decor and everything set up. I'm excited for it. We really are putting those little touches. It's gonna be like chef-prepared meals that are gonna be delivered to the cabins on demand.
Breakfast. Packages or like recruit boards. We're working with a lot of local restaurants in the area and a lot of like good chefs to be able to curate something so that people don't wanna cook, then they can have that service delivered directly to them. We're not in the restaurant business, so there's not an actual kitchen or restaurant in this resort.
We're getting it created and brought on site. Same thing with RMTs we've reached out to. We can offer different, mobile essentially spa services. If you wanna get a massage, they would actually come inside the cabin as well. Yoga we've reached out to some yoga instructors.
If they wanted to do one on one yoga or group yoga and all that good stuff, so work in progress, but it's been a lot of fun planning it and it is really a business. This was our retreat that we did just in August. We had an amazing time with investors. We had speakers, we had music, we had entertainment.
We had food and drinks and all that good stuff. We're gonna do it again. This coming August as well. But, where else can we bring some cash flow and pull some cash flow in? Things like corporate events, there's lots of companies out there that spend big money to put some of their staff into private resorts like this.
I came from Mars and they did that quite a bit. Weddings retreat. If other people wanna do retreats even organizing different vendors, there's ways that we could do markup on certain vendors, but it's a business, right? There's staffing, there's marketing. There's a whole lot of components to running a business like that.
There's no really specific A to Z blueprint. This is not for the faint of part. It is super fun. It is awesome. It's a passion project. I think we'll do okay. We'll do well along the way. We're going to create the resort that we would want to be going to. I think based on what we're doing and our initial research that it should do well again, this is not typical, we've been having a lot of fun along the way.
The next resort retreat at inspired beach resort is going to be August 15th to 17th of next year. We are gonna be limiting it to 40 people. If you are interested in coming and attending our retreat next year, the tickets are available. I can add the link as well to the chat, but we're gonna have a ton of fun. We're gonna have great speakers again. Great music, amazing food. We had a good time. Didn't we?
Harry: You know what it was, I think what was probably the most Fun for me or inspiring for me is, and ably everybody online has this as well. The cool thing about being in real estate or being in the business where you can create things that don't exist is you cast a vision.
I remember when we walked on this property and it was dilapidated, there was a rotting house. There was no beach. It'd been abandoned for probably 20, 25 years. I remember standing there with you in the rain with some of our associates and just looking at it. And then saying, you know what, here's what we're going to do.
Not a hunt, not having all the answers. In other words, we didn't have green lights, all the web streets. We didn't know exactly, but we took that. We executed and took that step not long after that. You and I looked at each other Sarah and said, you know what? We are going to host a conference here. Now you're gonna remember, we said, we're gonna host a conference there when it was just a field of mud.
We had no idea what we were doing. We made that commitment. We booked the conference, we booked the time and then we had to build the thing and then figure out what we were gonna do at the conference. Probably what was most satisfying to me and money. It's cool when money's a byproduct, but created when you're in real life.
Money's not the only measuring state creating things that are gonna outlive you, creating things that people can enjoy and experience or beautiful places where people can live. It goes beyond money when you're able to do something like that. When we were in the resort and the conference was going on and people were having a great time and the sun was shining, we were out in the boat.
There was just this overwhelming feeling of satisfaction that Sarah and I had created. Something had been executed. I'd taken that step. Had taken the risk and at that juncture all came together nicely. And that was to me, more important than a paycheck.
Sarah: Yeah, absolutely well said. Awesome. I know we're up for time, but check out the website inspire beach resort.com and you can see what we're up to. You can see different events that are coming up. If you are interested in booking an event, a wedding or, booking the cabins or whichever cabin for a couple nights, reach out to me, you can send me an email. We're gonna do a special bonus for any.
Harry: Oh, I love that Sarah. See we're in business. No pride. We want your business.
Francois: Looks amazing though. And who wouldn't wanna go? So congrats.
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